“The Enemy Waits:” Rocket Launch Wounds U.S. Personnel in Iraq

There’s been a “dangerous escalation” in the Middle East conflict, according to U.S. officials, who are left bandaging the wounded after a rocket detonated inside an Iraqi airbase.

“Initial indications are that several U.S. personnel were injured,” an anonymous U.S. defense official told the press on Tuesday. “Base personnel are conducting a post-attack damage assessment.”

Iraqi military forces quickly located the vehicle that had been used to fire two Katyusha rockets at the base, which led to the discovery of eight more weapons that were being prepared for launch.

The Defense Department blames Iran-aligned militia groups for the attack, which is just one of many recent skirmishes launched by Iran-backed forces against U.S. personnel. No groups have come forward to claim responsibility for Monday’s events.

“What we are focusing on … is having … de-escalation conversations,” said White House Press Secretary Katherine Jean-Pierre. “We’ve been clear that we will defend Israel, but we do not want this conflict to escalate or spread.”

Since the attacks, Biden has spoken with leaders from Jordan, Egypt, and Qatar to coordinate reconciliation efforts in the region. A proposed deal that has been months in the making would include the release of 115 Gaza hostages. 

“He wants the war to end,” Jean-Pierre said. “We believe … the end of this war would significantly lower tensions in the region, and so we have been certainly laser-focused on getting that done.”

Biden recently described the negotiations as being in their “final stage.”

This new phase of the conflict comes just after Israeli forces killed Fuad Shukr, a top Hezbollah commander. Reports suggest Israel may also be responsible for the death of Hamas leader Ismail Haniyeh, though Prime Minister Benjamin Netanyahu offered no comment on the attack. Since those high-profile deaths, Israel has faced a barrage of drone and rocket attacks on military sites in its northern territory.

“Whatever the consequences, the resistance will not let these Israeli attacks pass by,” said Hezbollah leader Sayyed Hassan Nasrallah in a televised address, adding that international attempts to soften the blow would be futile.

It’s unclear whether the attack in Iraq is related to the terror groups’ intent to retaliate against Israel. According to an unnamed Hezbollah source in contact with Reuters, vengeance is still on the horizon.

“Iran will respond and Hezbollah will respond and the enemy waits,” Nasrallah said. “Making the enemy wait is part of the punishment.”

Experts warn that the rising tension could disrupt oil flows from the Middle East, raising gas prices and forcing consumers to pinch pennies just to stay on the roads. Surprisingly, however, investors seem to have been largely ignoring the warning signs of an impending shortage. Oil prices have remained relatively steady–or have even dropped–despite constant threats of supplier loss.

“It’s quite striking that the oil market so far is not preemptively pricing in the risk of what seems to be a very imminent conflict,” Daniel Yergin, vice chairman of S&P global, told CNBC.

Bad news for consumers: Besides contributing to rising energy prices, crude oil is also a key component of plastics and can hike the price of related goods. In a society that runs on plastic, everything from water bottles to electronics, diapers to medical devices, and so many more highly demanded products may see rising prices and decreased availability if crude oil supplies dry up.

Moreover, if investors fail to price in Middle Eastern risks and the market faces a sudden shortage–as may well occur if the U.S.-Iran conflict escalates to all-out war–the resulting rise in crude oil price could be a far heavier, quicker blow than if investors sensibly plan ahead. With multiple countries involved in the conflict and the U.S. sending more troops to the region, this is not the time for irrational optimism. It’s unreasonable to expect that the U.S. economy will remain untainted by events outside the country’s borders, particularly if U.S. soldiers and government funds are involved.

Fortunately, however, changes in the crude oil market take time to trickle down to consumers. Experts estimate that a rise in the price of crude oil takes three weeks to appear at the gas pumps–which leaves Americans with time to react in the face of even the most shocking market shakeups by selecting investments that can withstand the coming economic storm..

If worst comes to worst, there’s one store of value that holds its head high–even while international powers are squaring up for a deadly, unpredictable showdown.

From Peter Schiff’s newsletter: “Gold is valued particularly highly when all other investments have hit the floor …. While some other investments may have flashy short term gains, gold can help protect against the overnight devaluation nightmares of so many assets when the world as we know it rearranges.”